Blackberry: The Charge Of The Light Brigade

Yesterday RIM, now renamed Blackberry, introduced the Blackberry 10. Tech.Pinions columnist, Steve Wildstrom, is cheering for Blackberry as are many Tech.Pinion regular readers and millions upon millions of others. Does the new, re-invented, Blackberry stand a chance? Or is Blackberry merely metaphorically repeating the infamous charge of the Light Brigade? In order to answer that question, let’s look at some computing history.

The Personal Computer

In the late seventies and eighties, at the dawn of the age of personal computing, there were scores of different competing computers and computing operating systems. By the eighties, things had begun to shake out. One by one, computers like the TRS-80, Commodore 64, Apple II, Atari ST, Amiga and others took their final bows and left the stage forever. By 1995 the only two players left standing were computers powered by Windows and the Mac. And as many of you know, the Mac was barely standing.

From that day until this, no one has seriously challenged Windows’ leadership in personal computing. For almost three decades, Mac aficionados have insisted that theirs is the superior operating system. Did that help the Mac overcome Window’s dominance and secure the personal computing crown for itself? No it did not.

On February 19, 1996, in an interview with Fortune, Steve Jobs said:

“The PC wars are over. Done. Microsoft won a long time ago.”

He was right.

LESSON #1: HAVING THE BEST HARDWARE AND/OR OPERATING SYSTEM IS NO GUARANTEE OF VICTORY.

LESSON #2: ONCE A PLATFORM IS ENTRENCHED, IT IS ALMOST IMPOSSIBLE TO DISLODGE.

The MP3

In the self-same Fortune interview referred to above, Steve Jobs also said:

“If I were running Apple, I would milk the Macintosh for all it’s worth — and get busy on the next great thing.”

And that’s exactly what Steve Jobs did when he returned to Apple. Apple continues to milk the Mac to this day. And their next great thing was – the iPod.

In the late nineties, there were several companies competing to win the nascent MP3 wars. In 2001, Apple introduced the iPod, but it was really the one-two combination of the iPod and iTunes that eventually won the day. iTunes helped store, organize and deliver your music to your iPod and the it was the iPod – with its clean hardware, its easy to understand user interface and its easy to use click wheel – that helped you to easily find your music and play it.

“Do not renew an attack along the same line (or in the same form) after it has once failed.” ~ B.H. Liddel. Hart, Strategy

It’s important to understand two things here. First, the iPod was not a direct attack on Microsoft Windows. Far from it. In military terms, you don’t conduct a frontal assault against a well-entrenched enemy. In business terms, you don’t defeat the industry standard bearer just by being a little better — or even a lot better — at what you do. The Mac has been attacking Windows since 1984 and it still has only 5% to 10% market share to show for its efforts. (True, the Mac’s consolation prize is that it may garner as much as 35% of the sector’s profits, but that still does not make the Mac anywhere near the industry standard.)

Second, Apple did not win the MP3 wars simply by being better than the existing players from Sony, Archos and others. With the iPod/iTunes combo, Apple leap-frogged the existing market and created a whole new category of device. It was the synchronization of iTunes with the iPod that was its killer feature. And despite all the criticism that iTunes deservedly receives, no other competitor has come close to duplicating its functionality. In military terms, Apple created a whole new front. In business terms, Apple created a whole new category. And once Apple established itself as the standard for the new MP3 category, they never let go their grip. To this day, Apple dominates the MP3 market with over 70% market share and gawd-knows-how-much profit share.

Sony, Archos and others tried to unseat the iPod by providing cheaper devices with more features. Didn’t happen.

Microsoft came late to the MP3 game but they came with what they, and most industry observers, thought was the winning strategy. With PlaysForSure, Microsoft intended to duplicate, in MP3’s, the same success that they were enjoying in personal computing. Microsoft would create the operating system, license it to manufacturers and then watch as their open licensing system inevitably overwhelmed Apple’s closed operating system. Didn’t happen.

After a while, Microsoft tired of not gaining any market share (or any profits), threw their PlaysForSure partners under the bus, and created the Zune. (Kind of reminds me of how Microsoft is handling the Surface. But I digress.) It’s hard to remember now, but most industry observers predicted that the Zune was the beginning of the end for Apple and the iPod. At that time, Apple was a mere upstart and Microsoft was the 900 pound gorilla that everyone feared. What Microsoft wanted, Microsoft took. With the weight of Microsoft behind the Zune, how could it fail to become the industry standard? Didn’t happen.

LESSON #3: WHEN IT COMES TO PLATFORMS AND STANDARDS, TIMING MATTERS. THE FIRST MOVER AND THE FAST FOLLOWER HAVE THE INSIDE TRACK. THE REST JUST REMAIN AT THE BACK OF THE PACK.

The Smartphone

In 2006, Smartphones were ruled by the Palm, Windows, RIM and Nokia. In 2007, Apple introduced the iPhone. By 2013, Palm was gone, Windows Mobile was gone, Nokia was a niche player, dependent upon Microsoft’s new mobile operating system, and RIM was making a bold gamble to regain relevance. What’s important to understand is that Apple’s iPhone was not, as many thought, a more expensive smartphone. Rather, it was an inexpensive pocket computer. Apple did not really make a better smartphone. Instead, they opened a new front, created a whole new category of device, and then dominated that category. Google did an excellent job of fast following with Android and now, between them, Apple’s iOS and Google’s Android sell more than 90% of all smartphones.

Within a year after the introduction of the iPhone, Palm tried to reinvent themselves, but they lacked the resources to make it happen. Windows Mobile re-invented itself into Windows Phone 7, and again into Windows phone 8, and what has that gotten Microsoft? Perhaps 3% market share? Microsoft has all the resources in the world. They have tremendous business connections. They’re patient and persistent. And their Windows Phone operating system is well-respected. Yet they can’t seem to gain any traction in the phone market. If Microsoft, with all its advantages and with a four year head start, can’t gain any traction in the smartphone markets, then what realistic chance does Blackberry have?

LESSON #4: YOU DON’T OVERCOME A MARKET LEADER THROUGH A DIRECT ASSAULT. YOU FLANK THEM.

The Tablet

“Exploit the line of least resistance – so long as it can lead you to any objective which old contribute to your underlying object.” ~ B.H. Liddell Hart, Strategy

In 2001, Bill Gates was touting the advantages of the tablet. Yet in 2010, it took Apple only 7 months to sell more tablets than Microsoft had been able to sell in the previous 10 years. Did Apple do this by simply making a better tablet? No. Apple re-invented the tablet market by adding instant-on, longer battery life and a capacitive touch screen. But most of all, Apple re-invented the tablet by creating a wholly new touch user interface. Apple didn’t improve on the existing Microsoft tablets. They created a new category of device with a wholly new operating system.

By 1995, Microsoft’s Windows dominated personal computing, never to be challenged again. Neither Apple nor any other contender ever did or ever will unseat Windows from its dominant position. Instead, Apple created a new market and dominated it. By attacking Microsoft where it was weakest, Apple did in 7 months in tablets what it could not do in 20 years in personal computers.

LESSON #5: THE ART OF WAR IS THE ART OF AVOIDING A DIRECT ASSAULT AND IMPLEMENTING AN INDIRECT APPROACH TO ONE’S ENEMY. THE ART OF BUSINESS IS THE ART OF AVOIDING THE DIRECT ASSAULT AGAINST A COMPETITOR’S STRENGTHS AND LEVERAGING ONE’S STRENGTHS AGAINST A COMPETITOR’S WEAKNESSES.

Conclusion

Theirs not to make reply, Theirs not to reason why, Theirs but to do and die: Into the valley of Death

~ Alfred, Lord Tennyson, The Charge of the Light Brigade

Do I hate Blackberry or wish them ill? Absolutely not. I have tremendous respect for what they’ve done. The original Blackberry phones were category busters and a wonder to behold. But the truth is, it does not matter if the Blackberry 10 hardware and software are narrowly better than the iPhone or Android phones. They have to be so superior that customers will be willing to switch. Because remaining the number four, or even the number three, smartphone OS is not going to cut it with developers. And people don’t switch platforms unless the alternative is not just superior but FAR superior to their current platform. Just ask the Mac, the Zune, and Windows Phone 7.

If you want to argue that a fast follower can overtake a first mover, I will agree. If you want to argue that the Blackberry 10 – introduced over 6 years after the iPhone was introduced – is a fast follower, I will respectfully disagree.

In war, you don’t win a frontal assault unless you have overwhelming military superiority. The art of war is, in part, about how to avoid making frontal assaults. In business, you don’t win a war against an establised standard unless you have overwhelming product superiority. The art of business is, in part, about differentiating your product and advancing your strengths against your competitor’s weaknesses.

Blackberry is not creating a new front or a new category. They’re attacking the existing leaders where they are entrenched and strongest. Does anyone honestly think that the Blackberry 10 is so superior to the iPhone, Android phones and Windows Phone 8 that it will overwhelm any of them? If not, the Blackberry 10 is the charge of the Light Brigade all over again…with similar results, but lacking the poetry.

John Kirk

John R. Kirk is a recovering attorney. He has also worked as a financial advisor and a business coach. His love affair with computing started with his purchase of the original Mac in 1985. His primary interest is the field of personal computing (which includes phones, tablets, notebooks and desktops) and his primary focus is on long-term business strategies: What makes a company unique; How do those unique qualities aid or inhibit the success of the company; and why don’t (or can’t) other companies adopt the successful attributes of their competitors?

I (sadly) agree with everything here. I am in Ottawa and former colleagues now work at RIM and QNX (now also RIM). I would like a bright future for them and the local economy to benefit from a resurgent Blackberry.

But at best I can only see a slight slowing of the decline. Even before launch it was obvious that they couldn’t wow us with hardware. No one can anymore, we have reached the point of diminishing returns, every top phone now has higher DPI displays than the eye can detect(in every conceivable size), more CPU cores than will really every be needed for mobile use.

Likewise on SW, everyone now has fully functional near desktop equivalent OS capability. Mild changes in UI presentation aren’t going to set the world on fire.

Even the consolation battle for third seems lost. Microsoft has unlimited resource, I am drowning in MS advertising. Even TV shows are being paid for really obvious and gaudy placement that looks like it was written by Microsoft. I was flipping channels last night and thought it was a Microsoft Ad, but it was the show “Arrow” with a very blatant paid placement. As hideous as it was, it give MS the kind of saturation Blackberry can’t achieve.

Though I am not sure the “Light Brigade” metaphor is all that apt. That was a massive catastrophic blunder. This is more of a slow trickling decline from solid defensive action.

Not achieving a market disruptive product is hardly something I would damn someone for. Disruption is the stuff of dreams. Built of talent/art/science and luck. No one can create disruption on demand, not even Apple (though they do more than most).

FalKirk

“I am not sure the “Light Brigade” metaphor is all that apt. That was a massive catastrophic blunder. This is more of a slow trickling decline from solid defensive action.” – Defendor

Hmm, I take your point. I was thinking more along the lines of how Blackberry was attacking the problem – via a full frontal assault against entrenched opponents, rather than by opening a new front (creating a new category) or utilizing a flank attack. Instead, Blackberry is charging straight into the mouths of their competitors’ cannons.

Defendor

Except, creating a new category (AKA market disruption) really can’t be done on demand. Faulting RIM for not creating disruption strikes me as little better than the people claiming Apple is over without Steve Jobs because they haven’t produced a market disruption since he passed.

Absolutely not. Creating a new category is one of the hardest things there is. Blackberry did it once with their e-mailing phones and once is all most company’s ever do. Apple is unique in that they are that rarest of all beasts – a serial disruptor.

You’re right that I failed to address what Blackberry SHOULD do. If I were that smart, I’d be a billionaire, not an armchair critic. But the point I was trying to make was that company’s like Blackberry, Microsoft, etc, should not be trying to make a better PC, a better MP3, a better smartphone, a better tablet, etc. once a leader has been firmly established. That strategy simply does not work. It’s a frontal assault against an entrenched position.

The only way for a company like Blackberry to get back in the game is to start, and dominate, a different game. Asking Blackberry to create a new market may be unfair and unrealistic. But expecting them to succeed by doing what everyone else is already doing and doing well is not just unrealistic, it’s suicidal. Better to try a new tack than to repeat a strategy that has never succeed and is doomed from the start.

Steve Jobs said: “If I were running Apple, I would milk the Macintosh for all it’s worth — and get busy on the next great thing.” In my opinion, Blackberry should have focused its efforts on doing the next great thing rather than to devoted its resources to doing what’s already been done. The former strategy is hardly possible. But the latter strategy is impossibly hard.

Defendor

That Jobs said that before returning, and then returned and did exactly that, is almost as unbelievable as disrupting the market twice more after that (not to mention the disruptions when he was first at Apple).

I think RIMs only real chance had passed by 2009, and that was to be a fast follower when the market was disrupted. As a fast follower they likely would would have maintained a strong market share. But everyone but Google was caught flat footed by the disruption.

Google might have had a bit of an advantage sitting on Apple board while the iPhone was being developed, and having enough paranoia/luck to be working on their own platform as hedge against Microsoft dominance, and having no installed base to transition, they were in the perfect fast follower position.

But in 2013 you nailed it, they are stuck between the hardly possible, and the impossibly hard.

Walt French

Bear in mind that BlackBerry was, in its time, hugely disruptive and hugely innovative & far-seeing in developing its products.

And, although Microsoft has lots of money to blow on ads, so far they may be missing the mark. Microsoft is taking a head-on battle against Apple, attempting to leverage its brand and ubiquity against Apple’s popularity and savvy targeting. The as-yet almost dismal sales numbers may not reflect the impossibility of a third post-PC platform so much as the baggage that “Windows” carries with it in efforts to sell easy-to-use, purpose-specific devices.

FalKirk

“Bear in mind that BlackBerry was, in its time, hugely disruptive and hugely innovative & far-seeing in developing its products.” – Walt French

Heartily agree. I wish I had said that or emphasized that more in my article.

“Microsoft is taking a head-on battle against Apple.” – Walt French

One of my gripes about Microsoft is that they always take the path of narrow differentiation rather than the making sweeping changes to their products. I think that they were so big in the nineties that they could simply overwhelm competitors with “frontal assaults”.

The last time a Microsoft “frontal assault” worked may have been with Netscape. (And perhaps X-Box, although I have a lot of caveats with that one.) Microsoft simply out resourced Netscape with Internet Explorer. They then tried the same tactic with the Zune, Windows Phone 7 and now, the Surface, so far with very poor results.

“The last time a Microsoft “frontal assault” worked may have been with Netscape… They then tried the same tactic with the Zune, Windows Phone 7 and now, the Surface, so far with very poor results.” – FalKirk

Microsoft’s biggest strength is now its biggest weakness. Anything that could be folded into Windows for “free” gave Microsoft an advantage. That worked until Google built a better mousetrap. Google has employed the same tactics as Microsoft but the difference is that Google has mastered adding value to OTHER platforms as well as its own. When Microsoft created a free product and added it to Windows, it clearly only benefited Microsoft (and, arguably, consumers) and harmed Microsoft’s competitors. When Google creates a free product, it helps some of its competitors just as much as it harms them and clearly benefits users.

Walt French

James, I like the “for free” part of your observations. To my mind, the reason that Android has been so successful is NOT the “open” part of the equation; it is that “open” is a good signal that the software will continue to be pretty darn free.

Google says about as much in its AOSP charter.

And it’s very hard for a commercial business to compete against “free.” When Microsoft was bundling IE, they were giving away IE, but guaranteeing that (for a good while, anyway) users would not be able to buy a capable browser for OTHER OS platforms. There wasn’t a “market” for users to buy a browser on Windows — that sense of “free” and “market” being contradictory, duh — but there was a market of users to buy an OS, and while a savvy individual could assemble an OS at the time, he couldn’t likewise build a browser.

Regards Google helping its competitors, I’m not so sure. Since Google isn’t attempting to monetize Android — the astute Mr. Dedieu has called its consumer functions “cost centers” — its competitors are other ad agencies / networks. Every single use of Android or Chrome or GMail is meant to help Google’s DoubleClick ad service compete better by raising the advertisers’ satisfaction (willingness to pay) for ads that Google chooses to show. While I personally see laughable attempts at “relevance” by Google, I’m pretty sure that when I see a “1 simple trick to lose belly fat” or “What insurers don’t want Minnesota drivers to know,” the website host has eschewed Google ads for some reason. Those sites must put up with lower ad revenues per visitor.

tl;dr : Google’s emulation of Microsoft tactics is closer, and much less benevolent than many people imagine.

Much like Microsoft, Google is willing to commoditize to the value of zero the things from which other companies derive value. The simple examples are Windows and Office; Google offers Chrome OS and Google Docs to “starve” Microsoft. Android is offered to remove the value of iOS, the development of which is subsidized with hardware sales. Introducing Android, a mature, robust and fully featured mobile OS, has opened Apple up to market pressures from which it would otherwise be immune due to its vertical integration. Even with all of its strengths, Samsung would have no chance of competing with Apple because of Apple strength in software. Google subsidizes the software development of Android device makers so that they can chip away at the value of iOS by undercutting Apple’s profit margins which fund iOS development.

Why? Because Apple and Microsoft, because they control the largest software platforms, are competitors, directly and indirectly. As long as they control the platforms, it gives them a beach head into Google’s business and also limits how pervasively Google can implement its services on those platforms. With Chrome, Chrome OS and Android, Google can pervasively track users to provide advertisers with better demographics, profiles and patterning. I won’t even address the more nefarious aspects of Google’s technology. Gutting the value of Microsoft and Apple weakens their ability to establish footholds into Google’s business. Like Microsoft, Google understands that marketshare can be an effective firewall to disruption. Google is in the enviable position of generating almost all of its revenue from businesses, which allows it to court consumers to the detriment of Apple and Microsoft. This also allows Google to add value to Apple’s and Microsoft’s platforms without enriching either.

Google’s ultimate goal is to “bleed out” Apple and Microsoft, like Microsoft bled out Netscape. Overall, the strategy is working. Microsoft is paralyzed by its own incompetence and Chrome OS use is rising. Android is giving iOS all it can handle and driving down Apple’s margins. The only company Google fears is Facebook.

Walt French

I think we’re seeing Google’s business plan more or less the same way.

But maybe we differ on how effective it’s being against Apple. In saying, “Google subsidizes the software development of Android device makers so that they can chip away at the value of iOS by undercutting Apple’s profit margins…[o]verall, the strategy is working,” it seems like you think Apple’s margins are weak, and this will marginalize Apple.

It’s not clear that either (1) Apple’s margins have yet been cut, nor that (2) Apple has lost an appreciable number of sales it might have gotten in the absence of Android, or finally and most importantly, (3) that Apple either intends to sacrifice unit sales to keep the portly margins it enjoys.

Apple uses a combination of design, software, distribution and pricing to maintain its image of being the high-quality provider. But just as Steve Jobs said Apple didn’t know how to make a $300 netbook, they are quite happy to figure out a way to compete at that very price point—just not with a plain-Jane netbook; rather, a cute & more focused iPad Mini.

I can’t claim they WILL be successful in the future doing just that, but their willingness to try should make for interesting watching.

“It’s not clear that either (1) Apple’s margins have yet been cut, nor that (2) Apple has lost an appreciable number of sales it might have gotten in the absence of Android, or finally and most importantly, (3) that Apple either intends to sacrifice unit sales to keep the portly margins it enjoys.” – Walt French

Based on your points, I have to agree that Android’s effect on iOS is minimal at best. While Apple’s margins have indeed dropped recently, its an arguable point that Android had been responsible for price pressures. I’ve been of the mindset that the iPad mini was not a response to Android but an admission on Apple’s part that it was reaching the saturation mark for $500 tablets and needed a smaller, less expensive unit to sustain growth. Factor out the iPad mini, and there isn’t much to suggest that Android is eating away at Apple margins (though I think the general economic environment has and will continue to). In fact, it seems that Apple sold all of the inventory it had and still couldn’t meet demand. I have to concede that point. Mea culpa 🙂

jfutral

And they weren’t inexpensive yet they still dominated the scene. But I guess things have changed. Everyone seems to think low end is the only hope for relevance. I don’t understand that thinking.

Joe

FalKirk

“Everyone seems to think low end is the only hope for relevance. I don’t understand that thinking.” – jfutral

Nor do I. The goal is to add value in order to command a price that will allow one to enjoy a profit.

Rich

I don’t think the battle for third position is lost. I think Microsoft is the one that’s lost.

Kungfuey

John – excellent writing as usual. I’m also wishing that RIM (Blackberry) will have success. It’s a large North American company that is, I’m sure, vital to the local if not national economy. They were disruptors in their own right with their BB messaging and email client for mobile and I wish they can stay healthy and stick around a long time (at least for the employees and their families). With the state of the economy these days, I don’t understand people’s desire to see companies fail because they’re fans of a competing company’s products. Companies failing means real people losing real jobs. I wouldn’t want to wish that on anyone.

Grwisher

Technology is a bitch, and then you die! 🙂

pawhite524

Thank you for remembering this is about people- families, and not a fantasy sports league.

steve_wildstrom

BlackBerry management has clearly not to worry about the low end right now. The problem with the low end, of course, is that you can move millions of units, but at little or no profit. It also doesn’t help build your ecosystem, because low-end users are also not big buyers of paid apps or app-driven value added services.

Glaurung-Quena

I think One possible opening for blackberry is to survive in a niche market. They don’t want that, of course, because it means fewer sales, smaller profits, and less relevance.

To go back to the PC wars, there weren’t just two standards by the 90’s, there were also a few alternative OS’s that sold well in niche markets. For instance, the niche market of UNIX workstations belonged to Sun and a few others for years, until Linux came along. Likewise Amiga had the niche market of video special effects sewn up for a while with Video Toaster. Mac OS had a lock on various niche markets (eg, education, desktop publishing) in the 90’s and they’ve done a good job of defending their turf from Wintel PCs for the past 15 or so years (while struggling to make inroads into the more general market)

Blackberry has a chance to remain relevant in a niche market. For a long time, they owned the niche market of “phone that does email” and sold quite a few devices to people who needed to always be fully reachable by all communication methods. For a long time, Microsoft owned the niche market of “phones that are also tiny pcs.” That was back when every smartphone was a niche device. With the Iphone, Apple turned the smartphone from a niche device into something everyone wanted. But that doesn’t mean the end of those niche markets — just as Windows NT did not kill off the Unix workstation, because there were some things that Unix better than Windows.

Microsoft tried to battle Apple & Android head to head, and the result was they lost ground dramatically. Blackberry needs to avoid making the same mistake and instead defend its messaging & connectivity turf. There are always going to be people who need to be connected all the time, for whom the Iphone’s messaging and email capabilities are not quite good enough. My take is that to survive, Blackberry needs to focus on serving those people, and not get distracted by chasing the foolish hope of a significant market share in the more general smartphone market.

FalKirk

“One possible opening for blackberry is to survive in a niche market. ” – Glaurung-Quena

I was thinking the same thing. Blackberry had a niche with it’s super security and it’s Blackberry Messenger, but those two advantages got slowly – then quickly – eroded by competitors. Without those two bastions supporting them over the past six years, Blackberry would already be toast.

I think it’s unlikely that Blackberry will find a niche that others can’t emulate. And even if they can, that niche is certainly not apparent when I use foresight (although, as always, it will be abundantly clear when I use hindsight.) 🙂

My view is that they don’t have to, they just have to deliver a better experience in their traditional turf.

Windows has been able to do everything the Mac could do for over 15 years now, but Apple retains its hold on its niche markets because, starting with Jobs’ return, they defended their turf like mad — they made damn sure that the Mac continued to have all the basic office/internet software their customers needed (securing a guarantee that office would continue to be developed for the Mac), they made damn sure that all the specialized professional packages continued to be available for the Mac (by buying the software themselves when necessary), and they worked really hard on delivering competitive hardware plus ancillary benefits that their customers valued but the Wintel competition was unable/incompetent to deliver (hardware-software integration, design for ease-of-use, design for aesthetics, superior customer service).

Blackberry now is in the same position Apple was just after Jobs came back — badly losing ground to the competition, but still having a good toehold in their traditional turf.

Blackberry 10 is the first and most necessary step for BB to defend their turf — it’s a “good enough” general purpose smartphone OS running on “good enough” hardware. Now they have to push hard on delivering value to their niche market (the “must be connected always everywhere” crowd on the one hand, and the “mobile email needs to be as secure as our intranet email” enterprise crowd on the other). They need to provide things to those customers that Apple & Android aren’t interested or aren’t competent to provide.

Fortunately for them, Apple is focused on selling to general consumers rather than to enterprises or “must be connected” professionals (eg, Outlook integration was an afterthought with IOS’s email), Android is focused on following in Apple’s footsteps, and Microsoft is focused on trying to beat Apple/Android at their own game. By the end of the year, we’ll know if BB is smart enough to play to their strengths or if they’re going to follow Microsoft and make the mistake of chasing the general consumer smartphone market.

Rich

All this sounds good. I like it.

BB isn’t Microsoft and I think BB has a different following, which is a positive sign and one of my reasons for optimism about Blackberry.

You stated everything that I’ve been thinking and I think Blackberry has the same idea. I agree 100%.

steve_wildstrom

The security market remains important and BlackBerry continues to have an edge in it. BlackBerry launches with FIPS 140-2 certification, the highest security certification for unclassified information. Apple, after several years of effort, still isn’t quite there. Android is a security certification nightmare because the security capabilities of different OS versions, and of different OEM’s implementations of the same Android version, are all over the map. There’s a reason why I still see so many BlackBerrys in Washington and why they remain so common in health care and financial services. These may be niche markets, but they are big niches.

Walt French

Very good points.

However, if I read the stats right, the US Gove employs about 2.8 million people in total — many of whose jobs require zero security. I’d SWAG that this could be at most a million phones a year. Even at $500 per device, that’s less than 4% of RIM’s shrunken 2012 revenues. Possibly helpful, possibly a good sign to some very security-conscious companies and contractors, but nowhere close what BlackBerry needs.

Further, if they wanted a chance, how much work would Apple have to do for iPhones to be acceptable under FIPS 140-2, versus how much work BlackBerry needs to do to be competitive to ordinary users? Wikipedia is kinda coy about the various levels of the standard, so perhaps different agencies set different standards. In any case, if the Feds really need this type of secure device, isn’t it likely that they are seeking alternatives to an at-risk, sole-source solution?

Grwisher

Regarding: “There are always going to be people who need to be connected all the time, for whom the Iphone’s messaging and email capabilities are not quite good enough.”

The iPhone has me fooled. What are the features that the iPhone doesn’t have to make me “be connected all of the time”? I thought I was connected all of the time. Maybe I’m not and don’t know it. What capabilities are not quite good enough?

Rich

Using logic, you can say the Z10 and the Q10 won’t succeed in the marketplace. Using intuition, I say they will.

rationalchrist

Please define what is the success in your view? 10 devices per quarter, or 100 mil per quarter? profit $10 per quarter, or $10 billion per quarter? some rough measurable number please.

Rich

I’m defining success as 3rd place in the market behind Apple and Google. No definition beyond that.

steve_wildstrom

Interestingly, that appears to be the way BlackBerry management defines it, at least for now. The initial game is to beat Microsoft for No. 3, If they can do that, they’ll worry about bigger things.

I think folks have forgotten exactly what the iPhone was when it came to market. It was not just another smartphone. It was -THE- smartphone. Apple crushed the market because it MADE the market.

That’s not going to happen again because it literally can’t. The smartphone is already here, so companies are just fighting over a piece of the pie – albeit an expanding one. For Blackberry to see amazing success it needs to bake its own pie.

Instead they’re making a pie that maybe – might be – could be – sorta – as good as the one others have been serving for half a decade.

This is an exceptional article John. I really can’t knock your reasoning and, based on the evidence, that is the likely outcome.

I think Blackberry has a chance because I don’t really see the massive lock-in regarding Android that I see with iOS. Other than the trolling yahoos on the Internet, I don’t know anyone who loves their Android device or has invested a ton in apps. In other words, I think there is a lot of money in the “cracks.” The reason why I think Blackberry will benefit in a way Microsoft has not is because people have actually developed passion for the Blackberry brand and many people have positive associations with it. The same can’t be stated for Microsoft. I think Blackberry has a dynamic from which it can draft. I think there are a lot of people out there who are not so wedded to Android that they won’t look at another option. That being stated, I definitely don’t see many iOS users jumping ship.

I would have liked to see a stronger product yesterday but I think Blackberry has at least bought itself time, 1 year at least, 2 years tops. If it can smooth out the kinks in the platform, I see it becoming profitable again. It will likely never be what it was, but Blackberry has at least a chance of reestablishing itself into some comfortable niche. Ironically, I think the “game changing” technology introduced yesterday is the QWERTY model, the Q10. That is an area in which Blackberry still dominates and even die-hard techies seemed to be interested in the form factor.

I just think the market is so vast that the users are out there for Blackberry to find. Android ISN’T Windows … there are no ESSENTIAL applications, like Office or Photoshop, that are locking people into the platform. Most Android people already use their smartphones like feature phones.

Walt French

Interesting observations. But back in the day when BB was king, the market was much smaller—and users’ ability to get fast, reliable messages was worth a LOT to their employers, who dedicated support teams to make it happen.

That’s not the market today. Yes, it’s an important part of it, but there’s not much opportunity to leverage it for people who want fun, inexpensive, cutting edge, mobile entertainment, desktop/tablet/phone-integrated, ultra-inexpensive or many other objectives that people have in mind when they buy phones.

Yes, perhaps Android is in weak hands. I guess that was always Google’s business plan, though, and is in a perverse way a strength as much as a weakness. But none of the BB attributes show why it’ll succeed in attacking that direction.

I think just being a different option will help. Think of it this way.

You can buy a red phone or a blue phone. Those are the only two colors available, regardless of how many people are purchasing them. So the market is split between the two.

Then someone offers a yellow phone. It isn’t any different from the red or blue phone, just the color. The basic fact is that people will buy the yellow phone simply because it isn’t the red or blue one. As long as the yellow phone is comparable, it will get sales. Maybe not as many as the red or blue but some.

I don’t think Blackberry has to be substantially better than Android or iOS, I think it can succeed simply by being DIFFERENT from either. I think Blackberry has succeeded in introducing a product with a different philosophy than iOS or Android, something that is uniquely Blackberry. This may be all the differentiation that is required.

FalKirk

If Blackberry has one thing going for it, it is their passionate fan base. People really do love their Blackberry’s.

Walt French

Well, this is a very nicely-written summary of how Disruptive Innovation has worked as we transitioned from pagers & PDAs, thru BlackBerrys and onto smartphones/ultramobile PCs.

There’s one NEW and related development: Apple’s introduction of a 128GB iPad, just days before Microsoft’s 128GB Surface Pro goes on sale. Ever since Jobs advised Apple to “milk” the Mac (and everybody should note, that didn’t mean Mac customers but rather that the Mac provided the basis for iOS), Apple has been taking the end-run approach you have characterized here.

But right after its third birthday party, iPad decided it had grown up enough to tackle that old nemesis, and Schiller declared that the iPad was a great ultra-mobile business machine, putting it head-to-head with the Surface Pro for several data-, media- and graphics-heavy business purposes.

I have no doubt that we’ll see several other changes to make iOS devices more valuable in business settings, maybe something like a corporate-hosted version of iCloud, the same way that there’s a corporate version of the App Store.

I’m stocking up on popcorn in anticipation of the Big Game. No, not that thing Sunday.

I don’t think iOS has a level of capability that makes it comparable to Windows on a PC. In my opinion, it doesn’t scale well to the $800 price point. I’m not a fan of Surface Pro but I don’t think there is much argument that an iOS device is no match for a full-fledged PC running Windows. This looks like a stop-gap until Apple can create something more credible in that price range. I think it’ll either take shape as a comprehensive upgrade to the capabilities of iOS or a new device specifically to bridge the gap between iOS and MacOS X. Interestingly enough, a “hybrid” might be just the ticket, though there are no signs Apple will move in that direction.

The only thing different between Windows 8 & iOS is that Windows 8 has the ability to run legacy Windows apps in addition to the touch-enabled Metro apps. Strip away that legacy capability and two are no different. And I have no doubt iOS will get more capable over time..

I’ve been reading a very unhappy Ars Technica writer’s article about how much of a letdown Office ’13 is. As I read it, a complaint about the same old concept with a halfway-built set of big buttons & menus to replace (alas, only) most of the detailed features that festoon Word & Excel; not a rethink of what it could/should be on a tablet.

My sympathies to the Office team because that was foisted on them by the decision to make Win8 a Swiss Army Knife. The outcome is exactly what was expected.

I remember my keen disappointment when I first opened the Programmers’ Guides for the Mac almost 30 years ago. A single-user, single-task operating system in the 80’s, WTF? Yes, 20 years later they evolved it into a proper unix OS, and a decade after that, into iOS. Every tiny decision about multi-tasking, memory management, etc., tuned to the needs of the very limited resources. And because of limited resources, multi-touch, pinch-n-zoom, rubber-banded scrolling were born.

Maybe in another few years, Moore’s Law will provide for relaxation on Apple’s strict insistence of one visible app at a time, or other tendencies towards Windows. But I’ll bet that we won’t see the filesystem inside of a decade, if ever. Apple doesn’t want to be Windows because they think that 90% of the people on the planet can’t hope to control Windows, let alone enjoy it.

(And I kinda agree with ’em.)

Rich

Windows 8 is not a good product for desktops, and in mobile MS has quite simply missed the market. Microsoft’s sales won’t improve until they make a large change of direction. And that will not happen until they get a new CEO.

Honestly, I think it is about time iOS gets more enterprise-friendly (iCloud & iWork included). People always harp about Apple being a consumer electronics company but if you really take a higher-level view, they are a devices + services company.

Granted, they have focused far more on the mainstream consumer but there is no reason they cannot take that fight to the business realm, at the very least SMBs.

pawhite524

John, Fascinating and eminently literate article as usual, IMHO. Your imagery of frontal assault and disruption brought the following to mind for me: American football used to be a grind it out running game between two lines, offense and defense. The introduction of the forward pass (a disruption) changed the game forever. In my mind, Apple/Steve Jobs didn’t invent any category but did find a way to “introduce the forward pass” to the marketplace. And yes, I am caught up in the Super Bowl even though my team is out of the playoffs. Should be a really good game…

FalKirk

I love your football analogy.

pawhite524

You are welcome and thank you for coming to Analogies R Us!

I do know I stood on your shoulders to get there.

benbajarin

I also love your football analogy. Has caused me to start thinking about a range of things I hadn’t before.

My issue with RIM/Blackberry isn’t whether the new offerings can grab a decent/profitable share of the market – it is about what comes next. Can subsequent iterations come along fast enough to keep up with a moving target? Apple has all the money in the world to keep updating and innovating. And it seems to be ingrained in their company culture to do so. RIM on the other hand were not only late into the game in the first instance (after the first iPhone came out) but they then also had lengthy delays with getting the BB10 and Z10 ready. The leaders are puling away faster than RIM/Blackberry can respond. In that scenario, playing Me-too, is a losing proposition. And RIM/Blackberry is a “phone” company, they aren’t going to suddenly come up with some sort of revolutionary new category of product. And anything they can make and innovate inside their patch (that has demonstrable value) Apple and Android can do “me-too” in a flash. Regardless of whether they try and avoid a head on clash or not, they are surrounded on all other sides by water anyway, and their problems, challenges and competitors will only get bigger from here. To use a different military analogy – they are already inside the No-Escape envelope.